Correlation Between Shinsegae Food and Nable Communications
Can any of the company-specific risk be diversified away by investing in both Shinsegae Food and Nable Communications at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Shinsegae Food and Nable Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinsegae Food and Nable Communications, you can compare the effects of market volatilities on Shinsegae Food and Nable Communications and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Shinsegae Food with a short position of Nable Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsegae Food and Nable Communications.
Diversification Opportunities for Shinsegae Food and Nable Communications
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shinsegae and Nable is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Shinsegae Food and Nable Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nable Communications and Shinsegae Food is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Shinsegae Food are associated (or correlated) with Nable Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nable Communications has no effect on the direction of Shinsegae Food i.e., Shinsegae Food and Nable Communications go up and down completely randomly.
Pair Corralation between Shinsegae Food and Nable Communications
Assuming the 90 days trading horizon Shinsegae Food is expected to under-perform the Nable Communications. In addition to that, Shinsegae Food is 1.86 times more volatile than Nable Communications. It trades about -0.26 of its total potential returns per unit of risk. Nable Communications is currently generating about -0.14 per unit of volatility. If you would invest 673,000 in Nable Communications on October 25, 2024 and sell it today you would lose (31,000) from holding Nable Communications or give up 4.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinsegae Food vs. Nable Communications
Performance |
| Timeline |
| Shinsegae Food |
| Nable Communications |
Shinsegae Food and Nable Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinsegae Food and Nable Communications
The main advantage of trading using opposite Shinsegae Food and Nable Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsegae Food position performs unexpectedly, Nable Communications can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Nable Communications will offset losses from the drop in Nable Communications' long position.| Shinsegae Food vs. Samsung Electronics Co | Shinsegae Food vs. Samsung Electronics Co | Shinsegae Food vs. KB Financial Group | Shinsegae Food vs. Shinhan Financial Group |
| Nable Communications vs. Shinsegae Food | Nable Communications vs. Korea Air Svc | Nable Communications vs. Hanjoo Light Metal | Nable Communications vs. Jin Air Co |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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